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Understanding Nonprofit

Organisations

An Introduction

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On a typical day, our lives are touched repeatedly by the world of nonprofit organisations.

E.g., daycare center, school, hospital, YMCA, college, museum, job-training center, nursing home, environmental protection group, Girl Scouts

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Figure 1.1 The Role of Nonprofits In Society

Government

Private SectorEnterprise

ThirdSector

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Private Sector – Or Market

‘ It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their own advantages’

Adam Smith (1776, p119) 

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Public Sector ‘ …those public institutions and those

public works, which though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual, or small number of individuals; and which it, therefore, cannot be expected that any individual, or small number of individuals, should erect or maintain.’

Adam Smith (1776, p122)

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Non-Profit Sector

‘ The essence of voluntary action is that it is not directed or controlled by the State and that in the main it is financed by private, in contradistinction to public, funds. It embodies the sense of responsibility of private persons towards the welfare of their fellows; it is the meeting by private enterprise of a public need.’

(Nathan, 1952, p12)

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Other Terminology

Independent Sector Nonprofit Sector Voluntary Sector Civil Society Nongovernmental organisations Nonproprietary organisations People’s organisations Community organisations Third sector The commons Charitable sector

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Non-Profit Organisations (NPOs)

The terms of non-profit would be dissimilar because in different countries or by different scholars, they focus on different aspects of an NPO. Some look at its mission or objectives. The others may stress on its characteristics or functions.

隨著不同國家，不同學者，強調的重點與思考角度不同，用詞偏好有所不同。有的以組織的目標或宗旨為考量，有的依據法源基礎的觀點，或根據組織管理基礎的獨特性，也有從組織不同的角色功能來思考。

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What Is a Nonprofit?

Tax & regulatory definition: an organization that- Enjoys special tax status- Faces a non-distribution constraint (profit=0)

Functional definition: an organization that forms to- Perform “public tasks”

environmental protection, social service provision- Perform tasks for which there is demand but no supply

from for-profits or governments religious activity, art museum

- Influence the direction of public policy political party, issue organization

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Cont.

Not conducted or maintained for the purpose of making a profit.

not commercially motivated

A nonprofit organization is one that has committed legally not to distribute any net earnings (profits) to individuals with control over it such as members, officers, directors, or trustees. It may pay them for services rendered and goods provided.

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Cont.

A nonprofit organisation is formed for the purpose of serving a public or mutual benefit other than the pursuit or accumulation of profits for owners or investors. The nonprofit sector is a collection of entities that are organisations; private as opposed to governmental; non-profit distributing; self-governing; voluntary; and of public benefit .

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Salamon’s definition

Formal Private Non-profit-distributing Self-governor Voluntary

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Thomas Wolf’s definition

Must have a public service mission Must be organised as a non-for-profit or

charitable corporation Governance structures must preclude

self-interest and private financial gain Must be exempt from paying tax Must possess the special legal status

that stipulates gifts made to them are tax deductible

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Why Nonprofits?

There are economic, historical, and political theories regarding the reason why nonprofit organizations exist in today's society. Economic Theories: Market failure - This theory is based on the

premise that not enough people desire a service or program to attract for-profit corporations to provide such services. Also, the fact that an organization exists without a profit-motive instills trust in the constituent.

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Cont.

Government failure - The government will not provide a service because of high cost or limited interest by the public. If there is not a large presence of constituents demanding a response from government, then the government is not likely to act. A small group of individuals can create a nonprofit organization to provide mutually desired services rather then trying to convince a majority of citizens to support such efforts. There is also a cultural resistance to "big" government. Citizens are skeptical about the government being involved in all aspects of community life.

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Cont.

Historical Theory - Communities in America were formed well before formal government. Citizens were forced to come together to address issues within their communities and work together to form a solution. Even when government developed a presence within a community, citizens were afraid of the bureaucracy and often sought out solutions through voluntary association. Religion also provides a strong foundation for charity and altruism through Scripture and a sense of duty taught within the church.

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Cont.

Political Science Theory - Nonprofit organisations provide an avenue for civic participation. People are able to assemble and work towards a common goal with an intent to benefit the public. Nonprofit organisations

provide an outlet for pluralism and solidarity.

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Cont.

In a book by Lester Salamon called America's Nonprofit Sector, the author concludes that the nonprofit sector exists to serve four critical functions:

Service Provision: Nonprofit organizations provide programs and services to the community. Often times, nonprofits are formed or expanded to react to a community need not being met by the government. Nonprofits also tend to have the ability to act faster then government in response to an issue. Nonprofits do not have to wait for a majority of citizens to agree upon a proposed solution. Rather, they have the ability to react to a specialized need or a request by a small group of citizens.

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Cont.

Value Guardian: Nonprofit organizations provide a mechanism for promoting individual initiatives for the public good. Nonprofit organizations provide a means by which members of a community can take action in an attempt to change the community they live in. These actions may take the form of developing a local neighbourhood watch program or, on a larger scale, developing an organisation that responds to world relief efforts.

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Cont.

Advocacy and Problem Identification :

Nonprofit organisations provide a means for drawing public attention to societal issues. Nonprofit organizations make it ‘possible to identify significant social and political concerns, to give voice to under-represented people and points of view, and to integrate these perspectives into social and political life’.

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Cont.

Social Capital: In America, the nonprofit sector can be seen as a bridge between capitalism and democracy. Nonprofit organisations develop a sense of community among the citizens by providing a means to engage in social welfare.

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Issues topics for Nonprofits Poverty

Poverty is a relative concept, not an absolute standard.

Poorest Richest

In the United States, the richest 1 percent of households owns 38 percent of all wealth.

The top 20 percent owns over 80 percent of all wealth. In 1998, it owned 83 percent of all wealth. (Wolff, 2003).

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The top 1% of Americans own as much wealth as the bottom 95% percent. 

The total wealth of the top 60% of Americans is 500 times the total wealth of the bottom 40%.

The bottom 40% of households own one-fifth of 1% (or 0.2%) of the nation's wealth.

Bill Gates (net worth approximately $50 billion) alone has more wealth than 40% of the U.S. population combined, or 120 million people.

Ratio of the net worth of the richest 1 percent of U.S. households to the size of the national debt: 2:1.

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Cont.

Share of national wealth by percentage of population. – Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000 (Original graph by Devesh Kumar)

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Source: Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000. Table 2. (Courtesy, United For a Fair Economy)

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North-South Debate ( 南北論戰 ) (factors: e.g. weather, geographical

location, natural resources, social customs, religion, historical development, ideologies)

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Save the Children http://ww.savethechildren.org/

United Nations Children’s Fund http://www.unicef.org/

World Vision http://www.worldvision.org/ One: make poverty history http://www.one.org/about/ Grameen Foundation

http://www.grameenfoundation.org/

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Issues on Medical Care Health is a complete physical, mental

and social well-being, and not merely the absence of disease or infirmity. (WHO)

Places without health care system; people get sick, people get help

Sick people should get treated equally, not because they are rich or poor.

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Cont.

AIDS.ORG Educating, Raising HIV Awareness, Building Community, http://www.aids.org/ British Heart Foundation, http://www.bhf.org.uk/ National Kidney Foundation, UK

http://www.kidney.org.uk/ British Lung foundation, http://www.lunguk.org/ British Nutrition Foundation,

http://www.nutrition.org.uk

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Cont.

Organ Donation and nonprofits

Organ Donor Foundation, South Africa

http://www.organdonor.org.za/ Mohan Foundation (Multi Organ Harvesting Aid Network),

http://www.india4u.com/mohan/index.htm

‘Don't take your organs to heaven for heaven

knows they are needed here’.

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Environmental Issues Kyoto Protocol (1997) Green Peace International http://www.greenpeace.org Earth force (engages young people as active citizens wh

o improve the environment and their communities now and in the future)

http://www.earthforce.org Environmental Defensehttp://www.environmentaldefense.org/home.cfm Seacology http://www.seacology.org

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Employment issues Equal opportunity Free from discrimination Especially for the disabled and racial

minority. Gender issues, equal pay Job security, workplace safety Etc.

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Cont.

Employment OpportunitiesEmployment Opportunities is a national charity helping people with disabilities find and retain work. We also provide a wide range of support and advice to employers on disability and employment issues.http://www.opportunities.org.uk

Skill: National Bureau for Students with Disabilities(Skill is a national charity promoting opportunities for young people and adults with any kind of disability in post-16 education, training and employment across the UK.) http://www.skill.org.uk

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Education issues The importance of education One way to get away from poverty Equal opportunity to receive education Educational resources should be shared by

all

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Cont.

Special Kids Fund– for children with disabilities and at-risk youth http://www.specialkidsfund.org

The Federation for Children with Special Needs– Early Childhood, Education & Special Needs, and Health Care http://www.fcsn.org

Charity for African Education http://www.africaneducation.org

Did You Know...£25/$40 will keep one African child in schoolfor a whole year! (World Bank figures for 1998)

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Traffic or Transportation issues Private owned cars vs. mass transit system Environmental concerns, historical sites vs. d

evelopmental issues (Hsuehshan Tunnel)

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Cont.

Charity Motor– Donate your car and choose your favorite charity to receive the proceeds http://www.charitymotors.org

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Safety/security Issues NPOs that deal with Terrorism Civil society and community Free from Fear for humans

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Definition

Civil society refers to the set of institutions, organisations and behaviour situated between the state, the business world, and the family. Specifically, this includes voluntary and non-profit organisations of many different kinds, philanthropic institutions, social and political movements, other forms of social participation and engagement and the values and cultural patterns associated with them. (LSE)

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Cont.

Civil society International http://www.civilsoc.org

The African Center for the Constructive Resolution of Disputes – creating African solutions to African challenges http://www.accord.org.za

Center for War/Peace Studies– think tank

http://www.cwps.org The Center for Security Policy http://www.centerforsecuritypolicy.org

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Issues on underprivileged people Ethnic minority (rights to education,

employment, etc) Women People with disability

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Cont.

Ethnic Minority Foundation– building a security base http://ethnicminorityfund.org.uk

Women Helping Women http://whwnj.com/

Women for Women International http://www.womenforwomen.org

Calvary Women’s Services– A safe caring place for tonight. Support, hope and change for tomorrow.http://www.calvaryservices.org

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Child Protection Issues Ownership: children can be considered

as Public goods inferior goods?? Children can’t choose their parents Some are born with a silver spoon, some

are quite opposite Child protection: medical care,

parenting, education, etc. bullying, child prostitution, pornography,

trafficking, emotional, physical, sexual abuse, neglect

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Cont.

Australian Childhood FoundationCounseling, Advocacy for Children, Education, Child abuse

programmes, inspiring and supporting parents, research. http://www.aaca.com.au Advocates for Survivors of Child AbusePrimary mission is the healing and well-being of survivors.

Ultimate goal is the prevention of all child abuse. http://www.asca.org.au Kids First foundationhttp://www.kidsfirst.com.au

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Self-portrait, Jacob, 6 Jacob is one of five children under the age of seven. Life at home is chaotic as Mum and Dad, while struggling to cope with their children, become physically and emotionally abusive.When Jacob appears to be distressed and anxious, he will become withdrawn and engross himself in his art. This is a self-portrait that Jacob produced on one such occasion. When Jacob arrived at the early childhood program, he was very upset and curled up on a rug, cuddling into a teddy bear, while he was gently patted. After some time, he settled, rejoined the group of children and then quietly wandered over to the easel and produced this masterpiece.

Source: Kids First Foundation

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Happy Me, Jessica, 5 Jessica lives at home with her mother, step-father, brother and two sisters. Because Jessica is the eldest child in the family, she has been expected to take on far too many adult responsibilities within the home.Dad is a strong disciplinarian, which has led to physical and emotional abuse, and has included being locked in an outside shed as punishment. Jessica always appears to be hungry and will raid rubbish bins and steal food from other children’s lunch boxes. Jessica has become a very sad, anxious little girl who suffers significant mood swings. Often Jessica is reluctant to participate in activities and will become extremely withdrawn. However, during a party at school when Jessica appeared to be having a wonderful time, she painted this happy picture of herself.Source: Kids First Foundation.

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National society for the Prevention of Cruelty to Children (NSPCC)(Since 1884) http://www.nspcc.org.uk International Society for Prevention of Child AbuseAnd Neglect (ISPCAN) KidscapePreventing bullying and child abuse http://www.kidscape.org.uk Barnardo’sGiving Children Back Their Future (Since 1876)http://www.barnardos.co.uk

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Issues on Elderly people Gerontology McDonalds (1980) invites elderly people to

drink coffee (3~5 pm.), marketing strategy: corporate social responsibility.

Medical care thanatology (study of death among humans) Fighting isolation, poverty, neglect

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Global Action on AgeingElderly rights, Health, Pension watch, Rural Ageinghttp://www.globalaging.org Age Concern Englandhttp://www.ageconcern.org.uk Ageing and ethnicity Provide info to minority ethnic older persons http://www.eng.aeweb.org Ageing in New York Fundto enhancing the quality of life for older New Yorkers and their families http://www.anyf.org Help age International http://www.helpage.org/

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Issues on Housing Basic human rights? Rent seeking Low income people can’t afford Homelessness Affordable housing                                                                                 

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BC Non-Profit Housing Association formed in 1993; representing the interests of the non-profi

t housing sector to government and the public;participates in housing policy and program development with all levels of government. http://www.bcnpha.bc.ca/

Canadian Housing and Renewal Association: Your National Ally for Affordable Housingpromotes access to adequate, affordable housing for low- and modest-income households, and seeks to heighten awareness of affordable housing issues through research, advocacy, networking and communications. http://www.chra-achru.ca

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Older homelessness http://www.olderhomelessness.org.uk/

Glasgow homeless network http://www.ghn.org.uk

Centrepoint http://www.centrepoint.org.uk/

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Issue Advocacy Patients vs. doctors (asymmetric information) Information Ethics Patients are Powerful

A diverse group of "managed care experts" singularly dedicated to helping patients improve their managed medical healthcare. Healthcare insurance companies have put profits before patient care. Cost containment measures have limited your ability to See a Specialist, Get a 2nd Opinion, Receive High Quality Medications and have your Surgery performed at your choice of institution. http://www.patientsarepowerful.org